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it's not a big habit of mine. Sometimes, I'll put on the headphones and go looking for MP3s to expand my musical horizons. If there's something I really like, I'll start procuring legal CDs of that artist. There's a lot of cool stuff out there that'd I'd never have listened to (and bought) if it weren't for MP3s on the internet. What I think is cool, I buy their CDs. This is why amazon/cdnow have mp3 samples for lots of albums - so you don't waste money on guessing whether an album suits your tastes or not.
I suspect it does hurt record companies a little. I think the general recession sort of economy is more to blame, but that's not a newsworthy scapegoat for them. It could also hurt the record companies a little because lesser known musicians could have equal opportunities on the web without involving traditional record companies because it tends to be less of a business structure and more of a sort of anarchist themed carte blanc.
Nobody ever said life is fair, so we don't owe the record companies a guaranteed future if the dynamics of their digital business change and they don't want them to.
Nonetheless, the internet offers great business opportunities as I alluded to in my first paragraph. Music is digital these days, and there is no going back. What hurts the record companies doesn't equally hurt artists, so I'm not buying the guilt trip they try to play.
On the other hand, as someone who administers internet networks, the file sharing can cause huge problems in terms of security and bandwidth allocation. Things work most reliably when the servers are at the center of the network with all the bandwidth. Often this music sharing is less of a peer to peer network and more of a giant vacuum cleaner sucking sound if you put the network patchcable up to your ear. Customers on the edge of the network or at a business get their computers accidentally turned into a server which is sharing music with hundreds or thousands of people a day, affecting other people's browsing in their business or causing bandwidth problems if lots of computers are involved. If it were a distributed system like usenet or caching or akamai, it would work faster and infinitely more reliably when the content is delivered from the center of a big network. In terms of network design strictly p2p is fine, but it often ends up with people with potentially fast connections getting swamped with requests making it an instant client-server system instead of p2p. Nobody wants to pay for this bandwidth. So often it gets restricted or shaped so that it does not overwhelm other services which everyone else depends on the internet for and is paying money for.
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